what happened?, page-37

What happened to VCR and QTM before it was entirely predictable and not unusual.

After stocks rise up fast , esp much discussed ones , you usually get one final spike up before the retracement. In the case of QTM and VCR this was compounded by the fact that both were in blue sky so virtually everyone was in profit..hence you get the usual over-excitement and back-slapping. Then on the day of the spike you often get those who waited and waited and finally decided to join the `party` and buy.

However what that don`t know is that others were waiting for the spike to sell into strength...the party is over [in short-term] but the buyers don`t know it.

On Fiday QTM had a bearish engulfing reversal but that didn`t stop people buying on that day or again on Monday.

Further on Tuesday VCR had a doji which can mean indecision as to direction but must be taken in context..in this case there was a prior uptrend so the doji indicated a top reversal pattern. Of course this never stops people rushing into a falling stock.

With both QTM and VCR you had people buying too late [on the spike] or too early during fall. This accounts for the intraday sucker bounces on the way down.

What is also usual is that the previous excitement during the rise gives way to panic or at least uncertainty during the fall. Some entered on peak with dreams of fast profits but suddenly find themselves with big losses. This usually manifests itself in questioning the stock or making rash assumptions [eg about patients health]

Anyway we then come to a phase in the fall where there is a dump...often by people who bought near highs as they finally decide to dump there losers [note these people often don`t even have predetermined stop losses]

NOW its at this stage where others who sold at/near spike come in to buy[see QTM yesterday]....often from the same group they sold to a few days ago. Its the circle of trading life.

And that is why in relation to VCR I am circling around waiting for signs of support/reversal [more sustained bounce] to reenter...as always my finger rests on the trigger and am just trading the price action .

Sorry for rambling on.....

Happy Trading
Z